BAKU, Azerbaijan, February 17. The EIB Group,
comprising the European Investment Bank (EIB) and the European
Investment Fund (EIF), has signed its sixth synthetic
securitization with BNP Paribas since 2017, aiming to support
French small and medium-sized enterprises (SMEs), mid-caps, and
green projects, Trend reports via the EIB.
Under the deal, the EIB Group will invest €112 million to reduce
BNP Paribas’ risks on existing loans, enabling the bank to provide
€337 million in new lending over two years. At least 30% of the new
lending will be directed to projects aligned with climate action
and environmental sustainability, supporting the transition to a
low-carbon economy.
In the transaction, the EIF provides protection on a mezzanine
tranche of €112 million, counter-guaranteed by the EIB. BNP Paribas
retains the senior and junior tranches. As a synthetic
securitization, the credit risk of the mezzanine tranche is
transferred via an unfunded guarantee, while the underlying loan
portfolio remains on BNP Paribas’ balance sheet. The transaction
qualifies as STS (Simple, Transparent, Standardized).
The securitized portfolio, with a total outstanding balance of
approximately €1.5 billion, includes mid-corporate loans originated
by BCEF, covering BNP Paribas’ exposures to mid-cap and upper-SME
corporate borrowers. The structure features pro-rata amortization
with triggers based on portfolio credit performance, a synthetic
excess spread, and a two-year replenishment period allowing
eligible assets to be added subject to performance criteria.
The transaction is designed to deliver optimal risk-weighted
asset (RWA) relief, freeing up lending capacity and enabling BNP
Paribas to further finance the real economy.
